Coherent Port Pricing Trends (1Q24)

Cignal AI has conducted an in-depth examination of trends in telecom / coherent port pricing every two years since 2020. During that time, the price per Gbps had been dropping consistently by -25% to -35% YoY except in 2021, when the decline was only 15%. As discussed in our previous Coherent Port Pricing Trends report, the 2021 anomaly was primarily due to supply chain issues, which kept prices higher due to limited availability.

In 2022 and 2023, the most significant change in telecom port shipments was the arrival of pluggable 400Gbps ports, most of which are shipped directly to network operators and not bundled with OEM optical hardware. This shift in the market means that the metric used in the past (OEM optical hardware sales / bandwidth deployed) no longer provides an accurate view of YoY declines. In this report, we shift to using the Telecom Market Revenue numbers in the Optical Components report as the numerator in our calculations. Doing so will provide a more accurate view of declines in per-Gbps bandwidth in an environment increasingly dominated by pluggables and direct shipments.

The analysis below indicates that per-Gbps pricing has resumed its long-term trend after the 2021 reduction and resumed a decline closer to 25% YoY in 2022. Over the next few years, the YoY decline is forecast to be slightly more than 20% as the primary driver of reductions shifts from speed upgrades of embedded optics to annual price reductions in existing pluggables.

Report Outline

• Two Years of Changes – Factors that impacted the cost of bandwidth since our last report
• Report Methodology and Metrics – How port pricing trends are evaluated and how the methodology has changed
• Results – Graphical trends in coherent port pricing over time
• Forecast – Predictions for future reductions in coherent pricing
• Analysis and Conclusions – Analysis of numbers and key takeaways

Two Years of Changes

Deployed modules continue to shift from lower speeds to higher speeds. Over the last two years, deployment of 100G and 200G (Gen30) modules has declined, while 800G (Gen90) shipments have risen rapidly. At 400G, shipments of embedded module (Gen60P) have declined while pluggable module (Gen90C) shipments have grown rapidly. Both the move to higher speeds and the transition to pluggable modules should cause the price per Gbps to decline.